His latest financial disclosure, filed earlier this month, still lists the Morgan Stanley line of credit. As of this week, Dolan has not made a decision as to whether he’ll seek repayment on his personal loans to the campaign, according to spokesman Christopher Maloney.
Cleveland.com and The Plain Dealer reviewed campaign-year financial disclosure statements for what OpenSecrets, a nonprofit that tracks money in politics,as the 10 wealthiest senators. Of those 10, only one disclosed taking out a bank loan to finance a campaign. Indiana Republican Mike Braun, who made millions running a trucking company, borrowed somewhere between $2.25 and $10.5 million over three loans from three Indiana banks to help pay for his 2018 run.
The loan Dolan took out seems to follow the “buy, borrow, die” tax avoidance strategy, according to Edward McCaffery, a tax law professor at the University of Southern California who’s said to have coined the phrase. The idea is that wealthy Americans can limit their tax liabilities by accumulating assets like stocks that appreciate in value without producing taxable income; borrowing money against those assets; and passing the assets on in death to their heirs.
Federal elections law only allows bank loans to campaigns if the loans bear the “usual and customary interest rate of the lending institution for the category of loan involved,” according to Brett Kappel, a Washington D.C.-based attorney with a specialty in campaign finance.